Home building bounced back much more sharply than expected last month, the latest indication that the economy has remained in high gear despite the Federal Reserve’s hesitancy to cut rates.
Residential housing starts rose 10.7 percent in February, the largest increase since May of last year. Construction on new homes was at a 1.52 million annualized pace, well above the 1.44 million forecast by Wall Street.
The rise in mortgage rates has kept many homes off the market as owners are reluctant to give up their current home loans. Most outstanding mortgages have interest rates much lower than current rates. This has given a big boost to home builders by pushing demand into the new home market.
Building permits rose to a 1.52 million rate, the fastest since August. That was slightly above expectations. Permits are often considered a leading indicator for the housing market.
